Author Topic: Realize Capital Gains While Staying Invested?  (Read 1764 times)

marcus0aurelius

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Realize Capital Gains While Staying Invested?
« on: September 27, 2016, 10:35:19 AM »
Hi Folks,

I have some taxable mutual funds with Vanguard. One of them was VDVIX (Dev Mkt Index), and another is VGSLX (REIT). I noticed a week ago that the unrealized losses on VDVIX and the unrealized (long term) gains on VGSLX were about the same. So I thought, hey, I could realize these and come out ahead on my taxes. So i put in an order to switch VDVIX to VTSAX, bam, realized losses. Now I just have to hold that for over a month and I'm good. I also put an order to switch VGSLX to VGSLX in the same account, hoping it would realize the gains. Well, that didn't work. It still shows those as unrealized. Is there an easy way to realize the gains and stay invested in the same thing? You'd think there would just be a button that says "Push here to realize gains." Now I see that Vanguard has a frequent trading policy on that fund, so I couldn't buy more for a month. Maybe I'm missing something, what is the easiest way to realize the gains?

Thanks   
« Last Edit: September 27, 2016, 11:03:30 AM by marcus0aurelius »

Mother Fussbudget

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Re: Realize Capital Gains While Staying Invested?
« Reply #1 on: September 27, 2016, 10:46:00 AM »
Call a Vanguard representative, and ask THEM this question.  I worked at the former ShareBuilder (now CapitalOne Investing), and I always recommended people call a broker/dealer when they have specific questions like this about their account.

seattlecyclone

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Re: Realize Capital Gains While Staying Invested?
« Reply #2 on: September 27, 2016, 10:55:20 AM »
Yes, in theory you should be able to do this. In practice, it depends on how Vanguard's systems are implemented. They may recognize that you're trying to exchange into the same fund and not do anything, and you may need to switch to a different fund first.

bacchi

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Re: Realize Capital Gains While Staying Invested?
« Reply #3 on: September 27, 2016, 10:59:18 AM »
Hi Folks,

I have some taxable mutual funds with Vanguard. One of them was VDVIX (Dev Mkt Index), and another is VGSLX (REIT). I noticed a week ago that the unrealized losses on VDVIX and the unrealized (long term) gains on VGSLX were about the same. So I thought, hey, I could realize these and come out ahead on my taxes. So i put in an order to switch VDVIX to VTSAX, bam, realized losses. Now I just have to hold that for over a month and I'm good. I also put an order to switch VDVIX to VDVIX in the same account, hoping it would realize the gains. Well, that didn't work. It still shows those as unrealized. Is there an easy way to realize the gains and stay invested in the same thing? You'd think there would just be a button that says "Push here to realize gains." Now I see that Vanguard has a frequent trading policy on that fund, so I couldn't buy more for a month. Maybe I'm missing something, what is the easiest way to realize the gains?

Thanks

I'm confused.

You sold VDVIX to buy VTSAX and realized the losses.

Then you tried to switch VDVIX to VDVIX? No wonder that didn't work. Or maybe you meant switch VGSLX to VDVIX? If that's what you meant, that would be a wash sale because your VDVIX generated a loss.

marcus0aurelius

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Re: Realize Capital Gains While Staying Invested?
« Reply #4 on: September 27, 2016, 11:04:32 AM »
Hi Folks,

I have some taxable mutual funds with Vanguard. One of them was VDVIX (Dev Mkt Index), and another is VGSLX (REIT). I noticed a week ago that the unrealized losses on VDVIX and the unrealized (long term) gains on VGSLX were about the same. So I thought, hey, I could realize these and come out ahead on my taxes. So i put in an order to switch VDVIX to VTSAX, bam, realized losses. Now I just have to hold that for over a month and I'm good. I also put an order to switch VDVIX to VDVIX in the same account, hoping it would realize the gains. Well, that didn't work. It still shows those as unrealized. Is there an easy way to realize the gains and stay invested in the same thing? You'd think there would just be a button that says "Push here to realize gains." Now I see that Vanguard has a frequent trading policy on that fund, so I couldn't buy more for a month. Maybe I'm missing something, what is the easiest way to realize the gains?

Thanks

I'm confused.

You sold VDVIX to buy VTSAX and realized the losses.

Then you tried to switch VDVIX to VDVIX? No wonder that didn't work. Or maybe you meant switch VGSLX to VDVIX? If that's what you meant, that would be a wash sale because your VDVIX generated a loss.

I typed that wrong, I've corrected in up there, but I tried to realize the gains on VGSLX by switching from VGSLX to VGSLX.

Proud Foot

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Re: Realize Capital Gains While Staying Invested?
« Reply #5 on: September 27, 2016, 12:27:11 PM »
Because your switch from VGSLX was to VGSLX (same fund) nothing happened.  To say in the same fund you would have had to sell and then buy back in to realize your gains.